A few Big Tech firms haven’t hesitated to pay top dollar to attract and retain leading AI scientists and developers. But for the rest of the world, it’s a different story.
Despite CEOs consistently ranking AI talent as a top strategic priority and a key driver of future growth, the majority of companies aren’t paying people with special tech skills significantly more than other workers. The problem is simple: For all the sums firms are pouring into AI, they aren’t yet seeing the returns to justify the great pay premiums many AI workers have been expecting. A recent Korn Ferry survey of more than 4,000 companies across 133 countries found firms are offering a premium of just 5 percent to 15 percent over similar positions.
Brian Dunn, director of the Institute for Compensation Studies at Cornell University, says firms have found that valuing AI skills is harder than they’d realized. Dunn distinguishes between two kinds of skills: the ability to implement AI tools to affect organizational change, and the ability to use those tools. “They know the pay for people who already know how to use AI should be higher,” says Dunn, “but how much higher is harder to figure out.” The data says as much: In the survey, 64 percent of compensation professionals report that they are unsure what level of premium to offer at this point.
In certain functions where disruption is more substantial, firms are in fact paying a higher premium for AI-skilled talent. Obviously, AI is transforming tech and digital roles first and fastest. This has led to some impressive salaries—the kind that make headlines—for engineering, data-science, machine-learning, and governance roles. Operations roles have seen the second-largest premiums; sales, finance, and human resources, among others, are seeing the lowest. But, given the pressure leaders are putting on people to develop AI skills, overall premiums are likely “too low to be effective” in attracting and retaining the talent firms want, says Tom McMullen, a senior client partner in the Total Rewards practice at Korn Ferry.
Peter Cappelli, director of the Center for Human Resources at The Wharton School, suggests these findings underscore the fact that AI isn’t yet generating enough revenue for firms to justify paying people more for relevant skills. “Introducing AI is mainly about organizational change,” he says, “not just hiring specialists.”
But companies are apparently willing to open wallets for AI-ready leaders: Nearly 40 percent of compensation professionals in the Korn Ferry survey expect higher base salaries, signing bonuses, and equity incentives to recruit and retain these leaders. “Firms are willing to pay AI-ready leaders more because they are the ones responsible for driving transformation and scaling adoption,” says Todd McGovern, global leader of the Total Rewards practice at Korn Ferry.
